Forgot your password?

How Do Payday Loan Lenders Approve Your Application?

By Edited May 18, 2015 0 0

Payday cash advances are a very popular way to get money fast, but people rarely stop and think about how these loan lenders get them money so fast. The way it actually works will probably surprise you, especially with loans that are applied for online. In this post I want to help you understand the payday loan process better with details on how they really work. Knowledge is key when applying for loans that aren't very transparent, and it will help you stay safe when borrowing money in these channels. It's almost too easy to get into trouble with a loan like this, so having this knowledge will give you a major advantage over most people who borrow money.

The fact that the online payday loan lenders don't usually check your credit score is a big reason why these loans work so dang fast. There are some payday lenders that do a quick check of your credit report, but it won't affect whether or not you can get approved. When you apply for a loan at a regular credit union or bank it takes so long because they are pouring over your credit report. Without a credit check, the interest rate of the loan naturally is driven much higher. When a payday lender doesn't know what your financial history is like the risk is much higher, and this leads to a lot of people defaulting on their loans. You're paying extra money to help lenders afford to track down the people that default on their loans.

Loans on the internet have made serious speed increases in the last couple of years. A few short years ago you needed to track down a fax machine to send in your application, fortunately now everything is checked online. Now a company named Teletrack takes care of the application verification for the lenders. What they do is like a mini background check that verifies all of the info on your loan application. The check happens in less than a minute, and from there the lender gets your application back to figure out how much they can lend you.

You're now going to run into the problem that your bank probably isn't going to work at the same speed as the lender. Getting your loan approved only takes an hour or so, but your bank of choice probably won't make the funds available to you that fast. To account for this, your payday lender will probably tell you that your loan is available on the next business day.

I hope that many of the questions about how these loans work have been cleared up so that you can apply for yours with confidence. Getting cash fast is not tough to do, but the more that you know the more likely you are to stay safe with these loans.



Add a new comment - No HTML
You must be logged in and verified to post a comment. Please log in or sign up to comment.

Explore InfoBarrel

Auto Business & Money Entertainment Environment Health History Home & Garden InfoBarrel University Lifestyle Sports Technology Travel & Places
© Copyright 2008 - 2016 by Hinzie Media Inc. Terms of Service Privacy Policy XML Sitemap

Follow IB Business & Money